Seeking to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship.

Oil Addiction: Don’t Count on Mexico to Supplant Mid-East Crude

Whether the calls for reducing America’s oil dependence on the Middle East that played such a big part in Barack Obama’s campaign will find a home in today’s inaugural address is an open question. But one thing is increasingly clear: America won’t be able to count much on Mexico, still its third-biggest supplier, to help it wean off Persian Gulf oil.

The Mexican oil industry is in steep decline. The huge production falls seen through the first nine months of the year continued in the fourth quarter, Bloomberg says, as Mexico’s state oil company is set to report its steepest annual production declines since World War II. Mexican production will fall from more than 3 million barrels a day in 2007 to about 2.8 million barrels in 2008, Bloomberg estimates.

President-elect Obama repeatedly promised to reduce America’s dependence on Middle Eastern oil. But with Mexico struggling to keep its head above water, and Canada’s tar sands an environmental no-go zone, making that promise a reality may be one of the next administration’s biggest challenges.